I have a Kia Rio, 2006, that I still owe on and want to upgrade to a 2006 or better VW Beetle Convertible. Is this possible?? I just do not know how this stuff works. Thanks to anyone out there that can help me.
2007-11-16 14:58:45 · 5 answers · asked by Sandy D 1 in Cars & Transportation ➔ Buying & Selling
It's all quite simple. You owe the bank $14,000 on the Kia Rio. You want to buy a new VW Bug convertible.
In order to get out of the KIA you have to sell it. And in order to complete the sales transaction you must pay off the loan. So that means you either sell the Rio for at least $14,000 and pay off the loan or you must make up any difference between the amount of your payoff and the amount you sold the car for.
So if you sell the Rio for $12000 you must come up with $2000 to pay off the loan in order to transfer ownership and the title to the buyer.
The same thing is true of you choose to trade in your Rio at the VW dealer for the new Beetle.
The dealer will make you an offer to "buy" your car. That is called the trade in value. If that trade in value is enough to pay off the loan then you're all set. If the trade in value is less than you owe then the difference is added to the price of the new car. Using the same example if the trade in value was only $12000 you would have to add $2000 to the price of the Beetle.
The negotiations with the dealer will involve the trade in value, the down payment amount and the selling price of the car.
2007-11-16 15:11:09 · answer #1 · answered by mccoyblues 7 · 0⤊ 0⤋
This doesn't make good financial sense. You owe $14k on a car worth maybe $8k or $9k. That means you are $5k-$6k "upside down". This is called negative equity. If you trade the car, the dealer may give you $9k (I'm being generous) which means you still owe $5k to pay off the loan. The dealer adds that $5k into the loan for your new VW. So your deal for a $20k VW is now $25k. You haven't even driven your new car home, and you are already $5k upside down. Same place you are today. Figure in the depreciation on the VW, and it's even more. It just doesn't make sense to me.
2007-11-17 02:00:19 · answer #2 · answered by Scott H 7 · 0⤊ 0⤋
Damn! How did you wind up owing that much on a Rio? The trade-in value on that is probably $9,000 at best. Unfortunately you are WAY upside down on a car that doesn't hold its value at all. Sorry to be the bearer of bad news but it's going to be several years before you'll be able to afford to trade that in.
2007-11-16 15:25:19 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
The real answer is yes. You can trade the vehicle if you have great credit, income and job time. The last condition is the ability to handle a large car payment. WCW
2007-11-16 15:54:02 · answer #4 · answered by WCW 2 · 0⤊ 0⤋
Given the way the economy and the dollar are looking I wouldn't recommend accumulating more debt.
2007-11-16 15:02:12 · answer #5 · answered by Rational Humanist 7 · 0⤊ 0⤋